Market theories ‘proved wrong’

Press, 22 January 1988, Page 9

Market theories ‘proved wrong’

The Government’s more-market theories for fanning have been proved wrong by under-produc-tion; according to the Opposition joint spokesman on agriculture, Mr Denis Marshall (Nat., Rangitikei). Many markets overseas for New Zealand lamb were now short of products because of the very low lamb kill so far this 1987-88 season. Up • to January 9 the season’s kill had been down 1.1 million lambs (16.8 per cent) compared with last season. Plenty of feed and low prices were causing farmers to hold on to their stock for better prices for heavier lambs later in the season. That might be unduly optimistic, Mr Marshall said, but farmers were being frustrated by the failure of reduced production to lead to higher prices. Farm-gate returns were as low as ever, with the schedule being propped up by pelt prices. Many markets were short of products, particu-

larly north-west Africa and Mexico, yet there was no incentive for farmers to produce extra, he said. While the meat companies were working to maintain continuity of supply to existing markets, new marketing opportunities were going begging. A great part of the problem was that although markets had been well diversified, 50 per cent of sales were in United States dollars, and while the New Zealand dollar was so strong producers were at a disadvantage. “The present meat industry situation proves the marketing theories of the Labour Government totally wrong,” Mr Marshall Said. Government Ministers had often promoted the view that New Zealand was over-producing lamb, and that a drop in production would create better returns for the producers. But lamb production had fallen 22 per cent over the last four years, he said, yet the producer was no better off and New Zealand was now losing export opportunities.